A new product passes through a sequence of phases from introduction to growth, maturity and decline. This sequence is known as the product life cycle and is associated with changes in the market situation, thus affecting the marketing strategy and the marketing mix. The product sales and time can be plotted as a function of the life-cycle phase as shown in Figure 7.2. The product life cycle depicts sales across time and contains the familiar introductory, growth, maturity and
decline stages. Likewise, diffusion of innovation models also consists of the same four stages, although not all four stages are modelled in all empirical studies (Mahajan and Muller 1979;
Spears and Germain 1995).
Introduction Phase
In the introduction phase, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows:
1. Product branding and quality level are established and intellectual property protection such as patents and trademarks is obtained.
2. Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.
3. Distribution is selective until consumers show acceptance of the product.
4. Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.
Growth Phase
In the growth phase, the firm seeks to build brand preference and increase market share. The following strategies are followed in this phase:
1. Product quality is maintained and additional features and support services may be added.
2. Pricing is maintained as the firm enjoys increasing demand with little competition.
3. Distribution channels are added as demand increases and customers accept the product.
4. Promotion is aimed at a broader audience.
Maturity Phase
At maturity, the strong growth in sales diminishes. The competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.
Time
Development Introduction Growth Maturity Decline
Sales
Figure 7-2: Product life cycle
The following strategies are followed in this phase:
1. Product features may be enhanced to differentiate the product from that of competitors.
2. Pricing may be lower because of the new competition.
3. The distribution becomes more intensive and incentives may be offered to encourage preference over competing products.
4. Promotion emphasizes product differentiation.
Decline Phase
As sales decline, the firm has several options:
1. Maintain the product, possibly rejuvenating it by adding new features and finding new uses.
2. Harvest the product—reduce costs and continue to offer it, possibly to a loyal niche segment.
3. Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.
7.4 MorPhology oF dEsIgn
Morphology of design is the study of a product throughout its entire life cycle. Figure 7.3(a) shows the nature of sales and profit during pre-market and market phases of product life cycle.
The various sub-phases of product life cycle as shown in Figure 7.3(b) are discussed as follows:
Need analysis: The first step of product design is need analysis, i.e. to recognize and analyze the needs of customers and to determine the aim or purpose of product design.
Feasibility: The second step is to check the feasibility of the solutions of the problem. There may be four types of feasibility checks: social, economic, market and environment.
Preliminary design: After the feasibility study, preliminary design of the product is prepared which is to be synthesized and analysed properly.
Detailed design: After analysis of the preliminary design, a complete or detailed design is to be prepared. This is the final design of the product.
Planning for production: After finalizing the detailed design, a complete schedule of production is made. The purchase order of raw material is placed and production is started.
Distribution: The product is distributed to the distributors and retailers in this phase.
Consumption: This is a very important phase. In this phase, real testing of design is done by the feedback from the customers.
Retirement/Recycling: At the end of the life of the product, it is retired and disassembled for recycling if it is possible.
7.5 standardIzatIon, sIMPlIFIcatIon, dIFFErEntIatIon and dIvErsIFIcatIon
7.5.1 standardization
Standardization is the process of establishing a technical standard, which could be a standard specification, standard test method, standard definition, standard procedure, etc. Product standardization is a technique in engineering design that aims to reduce the number of different parts within a product.
Benefits of product standardization are lower supply chain costs, less variety of suppliers, less supplier in numbers, less stock-keeping units (SKU), more economies of scale, less variety of production operations, faster product design, re-utilization of standardized parts across a product family, and re-utilization of standardized parts across a product generations.
As companies move towards standardized practices to gain efficiencies by producing fewer errors, less rework, and higher quality products in less time. The difficulty is creating the right
Social
Economic
Market
Environmental
Need analysis
Feasibility
Preliminary design Detailed
design
Pre-market phaseMarket phase
Planning for production
Distribution Sales
Consumption
Retirement/
recycling Pre-market phase Market phase
(a) Product life cycle (b) Flow chart of product life (–ve)
Profit (+ve)
Figure 7-3: Morphology of design
balance between standardization, flexibility and time. Too much standardization can reduce flexibility in the design environment and take too much time. Too little standardization allows errors and inefficiencies back into the design process.
7.5.2 simplification
It is the process of reducing variety of a product by limiting product range, design and/or type of material. Simplification offers boost to standardization. The marginal difference in size or specification does not add much in attributes, which may be termed as variety. Therefore, simplification is needed in product development. Simplification provides better customer service due to limited variety, better after-sales planning, and reduced volume. It is also helpful in reducing inventory level and complex material planning. It is helpful in focusing effort on limited parts and therefore lesser cost may be anticipated. It is helpful in better product quality due to concerted efforts on a limited product range. The combination of simplification and standardization leads to specialization. Limited but focused product variety is helpful for a company to specialize in a particular area.
7.5.3 differentiation
Differentiation is the process of distinguishing a product from other manufacturers already existing in the market. The aim of differentiation is to make it more appealing to the target market. It is the way to show that the product is different from another in terms of value. The areas of differentiation may include quality, price, functions, design, characteristics, advertising and availability.
7.5.4 diversification
Product diversification is the modification of a product or service to reach a more expansive target market. Unlike product differentiation, this is not about highlighting anything, rather it is about finding a new section of the market to attract. The downside to product diversification is that any failures will also associate themselves with the original brand. Alternatively, the brand could be so successful, it could suppress the other brands and make it unattractive.
Differentiation is less risky compared to diversification because it is an amendment of a pre- existing and an already established product or service; therefore, there is the guarantee that it is going to have interest among target customers. With diversification there is the risk of too little interest or too much interest, and with the too little interest possibility that could mean a loss of capital.
7.6 IntErchangEaBIlIty and Modular dEsIgn 7.6.1 Interchangeability
Interchangeability is the ability of an item to be used in place of another without any alteration or changes. Interchangeable items are so similar in function and physical characteristics that they are considered equivalent in performance and durability. Each is capable of replacing the others without causing a need for alteration or adjustment to fulfil the same requirement.
Interchangeability refers to a condition in which existing two or more items with characteristics, making them equivalent in performance and durability, making them fully exchangeable.
In mechanical engineering, interchangeability is the ability to select components for assembly at random and fit them together within proper tolerances.
7.6.2 Modular design
For designing a system synthetically, the system could be designed by two broad ways. The first way is to design the complete system using the known theories, and use the system, as it is designed, in the real conditions. The other way is to design the different components of the system separately, and test each component in separate conditions. Modular design is an approach that subdivides a system into smaller parts, i.e. modules that can be independently designed and then used in different systems to drive multiple functionalities.
Modularity is a method of organizing complex products and process efficiently (Baldwin and Clark 1997) by decomposing complex tasks into simpler modules so they can be managed independently (Mikkola 2001). Modularity in design has been researched to reduce design process complexity (Fujita 2002; Ulrich and Eppinger 1995). Modularity in design can be, therefore, defined as choosing the design boundaries of a product and of its components, i.e. on how to divide a system into modules, so that the design features and tasks are interdependent within and independent across modules (Huang and Kusiak 1998). Ulrich (1995) analysed the structures of design, in terms of product structure, physical functions, etc. and distinguished them into modular architecture and architecture integral. A modular system can be characterized by the following:
1. Functional partitioning into discrete scalable, reusable modules consisting of isolated, self-contained functional elements.
2. Rigorous use of well-defined modular interfaces, including object-oriented descriptions of module functionality.
3. Ease of change to achieve technology transparency and, to the extent possible, make use of industry standards for key interfaces.
In addition to cost reduction and flexibility in design, modularity offers other benefits such as augmentation (adding new solution by merely plugging in a new module), and exclusion.
Examples of modular systems are cars, computers and water purifiers (RO systems). Modular design is an attempt to combine the advantages of standardization and customization. A downside to modularity is that the modular systems are not optimized for performance. This is usually due to the cost of putting up interfaces between modules.
7.7 concurrEnt EngInEErIng
The ‘term’ concurrent engineering (CE), also called simultaneous engineering, was first coined in the United States in 1989. It means a way of work where various engineering activities in the product development, production process development and field support development are integrated and performed as much as possible in parallel rather than in sequence as shown in Figure 7.4(a) and (b).
(a) Sequential engineering
(b) Sequential engineering Need/Demand
recognition Design Manufacture Test Production
Saving in lead time Time
Requirements Engineering/Design
Process
Production
Figure 7-4: Sequential and concurrent engineering: a conceptual diagram
CE is a systematic/management technique used for product development, which provides an integrated approach to the design of products and their related processes from concept to disposal.
Various elements of product life cycle such as manufacturability, assemblability, testability, serviceability, reliability, quality, cost, disposability, user requirements, etc. are incorporated during the product design and development phase. Integration is usually accomplished through computerized technical tools and cross-functional teams consisting internal (e.g. manufacturing, assembly, R & D, service, process planning) and external (e.g. customers, suppliers) members.
The basic CE has two elements: improved process and closer cooperation.
7.7.1 sequential versus cE
The marketing department of an organization identifies the need of a product, expected performance and the viable price range from the potential customers. This department passes this information to the design department that works on the design specifications and detailed design. The design department makes a design, which is usually best from the viewpoint of design department only. This design is passed to the manufacturing department to develop the manufacturing processes necessary to produce the design. If any changes or corrections are required, then the design is passed back to the designers for necessary modifications or corrections.
Only when the manufacturing department is fully satisfied with the design, it passes the design to the next department in the progression as shown in Figure 7.5. This traditional sequential approach to the product design is more expensive and increases the product development lead time that organizations cannot afford these days because of decreasing product life cycle.
In CE, once the needs of the customers are identified, a multifunctional team is formed that will consider all the aspects of the product life cycle such as manufacturability, assemblability,
Need
identification Design/ Prototype
Engineering Test Manufacture
Figure 7-5: Sequential engineering process
testability, reliability, serviceability, cost, user requirements, disposability at the time of the design itself as shown in Figure 7.6. There is a close integration between the various departments during the design leading to a design that requires hardly any correction or modification. This way the product can be brought to the market quickly at a low cost and with an improved quality.
Produce Review
Verify Test
Design
Performance Manufacturability Assemblability Testability
Cost Quality Serviceability Reliability
Figure 7-6: Concurrent engineering process
7.7.2 Factors Influencing the need of cE
There are many factors that influence the need of CE, are discussed below as:
Lead time: One of the prime motivations for CE approach is the desire to decrease or shorten the product development time or lead time. It is fully recognized that addressing all the problems of product life cycle in the design phase shortens the product lead time. These days, for some products, average product lifetime is less than the average product development time. Therefore, for a company to survive and remain competitive, it has to decrease the product development time maintaining the high quality and low cost.
New manufacturing methods/technology push: New manufacturing processes are being developed continuously. Newer methods may bring down the costs, production time and even may improve the quality. But, such knowledge is often with the production engineer and not the design engineer. Therefore, to make the optimum use of newer manufacturing methods, close cooperation between design, production, and R & D departments is essential.
More demanding customers: Nowadays, customers are becoming increasingly more demanding.
Low cost and good quality, they take for granted and then they demand products, which are more closely targeted to their needs. Companies, hence, have to be not only effective, but also innovative to fulfil the demand of customized products.
Increased competition: With the opening of the global markets, the competition has increased manifolds. To survive in the market, an organization has to develop and introduce innovative products well ahead of the competitors. Any delay in the introduction of the product in time causes losses to the profits of the organization. Because of the short lifetime of the products, no time is available to the companies for re-engineering or modifications and the only alternative
left is to look forward to the philosophy of ‘right first time’. This can be possible by involving the people from manufacturing, finance, sales, services and specialist vendors, etc. at the time of the product design itself.
7.7.3 Benefits of cE
Concurrent engineering has been the focus of many industrial organizations for new product development due to the ability of the cross-functional team to reduce the total time to design and manufacture or time to market. This reduction in the time to market is a major source of competitive advantage in the manufacturing environment we have today. Use of CE should improve the performance of the organization in general, but certain human and organizational characteristics may affect the degree to which improvement is felt in the organization. Typical benefits of CE are given below as:
• Reduction in time to market
• Improved product quality
• Increased customer satisfaction
• Reduced cost of production
• Reduction in engineering change requests
• Increased return on investment
• Increased level of group productivity
• Interdepartmental cooperation
• Increased employee satisfaction
• Reduction in development cycle time
• Increase in sales
• Reduction in life cycle costs
• Design rationalization
• Better communication
• Increased flexibility to accommodate changes
• Decreased occurrence of obsolescence
• Better use of scarce technical resources
• Other benefits: reduced lead time for creating bid proposals, reduced product development costs, parts reduction, lower inventories, fewer rework orders, and less scrap.
7.8 EconoMIc consIdEratIons In Product dEsIgn
The consideration of cost plays an important role in the design decision process that we could easily spend as much time in studying the cost factor as in the study of the entire subject of design. Here, a few general approaches and simple rules are introduced below as:
Standard sizes: The use of standard or stock size is a first principle of cost reduction. Although great many sizes are usually listed in catalogues, they are not all readily available. Some sizes are used so infrequently that they are not stocked. A rush order for such sizes may mean more expense and delay. There are many purchased parts in a complete product; therefore, the parts selection must be based on case of availability in the market.
Large tolerances: Tolerance is most significant among the effects of design specification on costs.
Tolerances in design influence the probability of the end product in many ways; close tolerance may necessitate additional steps in processing or even render a part completely impractical to produce economically. Tolerances cover dimensional variation and surface-roughness range and also the variation in mechanical properties resulting from heat treatment and other processing operations. Since parts having large tolerances can often be produced by machines with higher production rate, labour costs will be smaller than if skilled workers were required. Also, there will be less rejection and less time-consuming in assemblies.
Breakeven point: Sometimes it happens that, when two or more design approaches are compared to cost, the choice between the two depends upon a set of condition such as the quantity of production, the speed of the assembly lines, or some other condition. There then occurs a point corresponding to equal cost which is called breakeven point.
7.9 aEsthEtIc consIdEratIons In dEsIgn
Today’s market is very competitive and there are a number of products in the market, having the same qualities of efficiency, durability and cost. In this situation, the customer is attracted towards the most appealing products. The external appearance is an important feature, which gives grace and lustre to the product and dominates the market. The growing realization of the need of aesthetic considerations in product design has given rise to a separate discipline, known as industrial design. The role of an industrial designer is to create new forms and shapes which are aesthetically pleasing.
The external appearance of the product does not depend upon only two factors, form and colour. It is a cumulative effect of a number of factors such as rigidity and resilience, tolerances and surface finish, noise, etc.
7.10 ErgonoMIc consIdEratIons In dEsIgn
Due to fast-growing technology, the system design has become very complex and the overall performance of the product or system depends on the performance of components. For example, the performance of a computer depends on the performance of RAM, hard disk, microprocessor, monitor and motherboard, etc. If any one of these components fails, computer becomes idle.
Thus, each part must interact with each other properly for smooth functioning of the computer. A designer should consider the following points to accomplish an overall performance of a system:
1. Reliability level 2. Safety
3. Convenience
4. Adaptability under various conditions 5. Case of maintenance
6. Cost.